Self-Directed IRA Investments
Self-Directed Private Equity IRA
Use your retirement funds to invest in privately held companies, funds, and partnerships outside the public markets.
Private placements in a retirement account
Privately held entities that grow inside your IRA.
A self-directed private equity IRA holds investments in privately held entities that are not available on public markets. Common structures include real estate ventures, investment partnerships, and operating businesses, usually as limited partnerships, LLCs, or private REITs.
Inside the IRA, gains and pass-through income are not taxed each year. In a Traditional IRA, returns are taxed only when you take distributions in retirement. In a Roth IRA, qualified distributions come out tax-free.
Accuplan is the third-party administrator for your account. American Estate & Trust serves as the custodian. You direct the investments. We handle the paperwork, the wire instructions, and the annual reporting that keeps your account in good standing with the IRS.
Most private placements are sold under Regulation D and limited to accredited investors. Confirm the offering's investor requirements before you subscribe.
How it works
Private equity IRA rules and how the investment flows.
Private equity inside an IRA follows the standard prohibited-transaction and disqualified-person rules, plus a few extra considerations because of how operating businesses pass income through to the account. Skim the labels, dive into the rows that matter to your account.
A few terms we'll use
- Private placement
- An offering of securities sold outside the public markets, usually to a small group of accredited investors. Most are sold under Regulation D, Rule 506.
- Accredited investor
- A person or entity that meets the SEC income or net-worth thresholds and is allowed to buy unregistered securities. The IRA itself qualifies based on the account holder's status. SEC, Accredited Investor Definition.
- Disqualified person
- You, your spouse, your parents and grandparents and up, your kids and grandkids and down, and any of their spouses. Plus any business those people control 50% or more of. The IRA cannot transact with any of them. The rules are complex. Talk to a tax advisor before doing any deal that involves someone you know. More on disqualified persons.
- UBIT
- Unrelated Business Income Tax. The IRA pays current-year tax on active business income that flows through an entity it holds, like operating earnings from an LLC or limited partnership. Passive income is excluded.
- UDFI
- Unrelated Debt-Financed Income. When the IRA borrows money to acquire an interest, the share of income tied to the borrowed amount is taxable in the current year, even if the underlying income would otherwise be passive.
- Required minimum distribution (RMD)
- A yearly amount Traditional, SEP, and SIMPLE IRA owners must withdraw starting at age 73, rising to age 75 in 2033 under SECURE 2.0. Illiquid private holdings can force in-kind distributions or a forced sale to meet the requirement.
How a private equity IRA holds your interest
The IRA owns the interest in the entity, not you. You direct the deal. The custodian executes the subscription.
Title held by the custodian
American Estate & Trust takes title to the interest in the name of your IRA. You direct the activity; the custodian holds the asset.
IRA is the investor of record
Subscription documents, K-1s, capital calls, and distributions name the IRA. Personal banking and personal mail stay out of the deal.
You complete the due diligence
You vet the sponsor, the offering memorandum, and the operating agreement. Accuplan does not recommend deals or verify offerings.
Funding from your dashboard
Once you have signed the subscription, request the wire from inside your Accuplan dashboard. The custodian sends funds directly to the sponsor.
The sponsor sees the IRA as the investor on the cap table, not you personally. Distributions and K-1s are payable to the IRA.
IRS rules that apply
The standard self-directed IRA rules apply to private equity holdings. The key thing to know: your IRA must stay at arm's length from you and your family.
No self-dealing
The IRA cannot invest in a company you own, work for the business, or take fees from it. You must stay hands-off.
No family transactions
Your spouse, parents, grandparents, kids, grandkids, and their spouses are all off-limits. The IRA cannot transact with any of them.
S-corporations are not eligible
An IRA is not an eligible S-corp shareholder. C-corps, LLCs, partnerships, and most other entity types are allowed.
Pass-through income may be taxable
Active business income flowing through an LLC or LP can trigger UBIT. Capital gains and dividends are generally excluded.
Private equity inside an IRA cannot transact with disqualified persons, and active business income passed through an LLC or LP can trigger UBIT in the current year. Full prohibited-transaction and tax rules. More on UBIT and UDFI.
What you can hold
Private placements your IRA can invest in.
Non-traded and private REITs
Real estate investment trusts that are not listed on a public exchange. Non-traded public REITs register with the SEC. Private REITs do not.
Limited liability companies
LLCs default to pass-through federal taxation, so income stays in the IRA. State treatment varies. Active business income inside the LLC can trigger UBIT.
Limited partnerships
Limited partners contribute capital and stay out of operations. Their liability is capped at their investment. A general partner runs the business and bears unlimited liability.
Private stock
Shares in a private company that does not trade on a public exchange, typically held by founders, venture capitalists, or private equity firms.
Privately held hedge funds
Pooled investment vehicles that give a group of investors greater buying power than they would have individually.
Other private placements
C-corporations, partnerships, small businesses, equity crowdfunding, convertible notes, land trusts, and franchises are all eligible.
How to start
Three steps from open to subscription.
Your dashboard runs the account, the funding, and the annual reporting.
Open
Open your self-directed IRA online in a few minutes. No paperwork to print or mail.
Fund
Move money in by transfer, rollover, or new contribution. Cleared funds are ready to deploy.
Direct the investment
You choose the private placement and complete your due diligence with the sponsor. American Estate & Trust, as custodian, signs the subscription documents and wires funds at your direction.
Need guidance?
Talk to a private equity IRA specialist.
Frequently asked
Private equity IRA FAQs.
Why hold private equity inside a self-directed IRA?
Private equity can generate capital gains, dividends, and pass-through business income. Inside a Traditional IRA, those returns are not taxed until you take distributions. Inside a Roth IRA, qualified distributions come out tax-free. Outside an IRA, every distribution and sale is a taxable event in the year it happens. These rules apply to 2026 tax year contributions and distributions.
Do I need to be an accredited investor?
For most private placements, yes. Offerings under Regulation D Rule 506(b) and 506(c) limit purchasers to accredited investors. Your account must qualify before the sponsor accepts your subscription. Confirm the investor requirements with the sponsor before committing capital.
Will my private-equity IRA owe tax?
Sometimes. Capital gains and dividends are generally excluded under IRS UBIT exclusions. Two situations flip the answer. Active trade-or-business income passed through an LLC or limited partnership inside your IRA can trigger Unrelated Business Income Tax (UBIT). Debt-financed income inside the holding can trigger Unrelated Debt-Financed Income (UDFI). More on UBIT and UDFI.
Can my IRA invest in an S-corporation?
No. An IRA is not an eligible S-corp shareholder. The IRA can invest in C-corporations, LLCs, limited partnerships, and most other entity types, but S-corp shares are off-limits.
Can I work for or take fees from the company my IRA invests in?
No. You must stay hands-off. Drawing a salary, taking management fees, or receiving any in-kind benefit from the business is self-dealing under IRS prohibited-transaction rules. All returns from the investment stay in the IRA, not with you personally.
What happens if I break the rules?
The consequence depends on who caused the problem. If you (the IRA owner) broke the rule, the IRS can treat the entire IRA as distributed, making the full balance taxable. If another disqualified person caused it, they face excise taxes that escalate if not corrected quickly. See the full prohibited-transaction rules.
How is the value of my private holding reported each year?
Privately held assets do not have a market price, so you furnish an independent fair market value each year. Accuplan, as administrator, collects the valuation. American Estate & Trust, as custodian, files Form 5498 with the IRS based on the values supplied. You do not file the form yourself.
How liquid is a private-equity IRA?
Not very. Private holdings are illiquid by design. Required minimum distributions at age 73 (rising to 75 in 2033 under SECURE 2.0) and any early distribution may need to be taken in kind, or require selling the underlying interest, which can take time and may force unfavorable pricing. Plan your liquidity needs before you invest. IRS, RMD FAQs.
How do I know if private equity investing is right for me?
Private equity inside an IRA can offer high returns but also carries high risk and limited liquidity. Most investors take a hands-off approach. You need to be a silent partner, or you risk breaking IRS rules. Speak with a qualified investment or legal advisor before committing capital.
Keep reading
More on private equity and self-directed investing.
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